I may not recall specifically what President Obama said, but I don’t think he indicated that profit maximization was not an appropriate goal for public policy, but rather it is not one for the person who holds the office of President. You may believe that is a distinction without a difference, but isn’t the point that the President is not the CEO of a profit-maximizing firm, but rather the leader of a country? Seems like a meaningful difference to me. Did George Washington, Abraham Lincoln, FDR and Ronald Reagan believe their main goal was to maximize profits?

I’m not an economist, but I don’t follow when you say “What if a business does not maximize profits? Then it is either not making the products that consumers want the most, or it is not producing its products at the lowest cost.” Can’t a business “not maximize” its profits by keeping its prices at the lowest possible level, but allowing its profit margins to be lower? I.e., assume (something economists are wont to do), that a firm (i) is producing at the absolute lowest cost, (ii) knows it could earn a profit margin of x% selling at that price, (ii) knows that if it raised its profit margin at all (i.e., increased prices) it would lose market share, but is nevertheless (iii) prepared to live with a profit margin of x-y%. May run afoul of certain worldviews where everyone is a certain type of homo economics, but perhaps a few such people exist. Or does that mean the firm should switch to making something that “consumers want the most”?

Let’s get back to basics: the consensus among academics—enforced by rigid conformism and threats of both social and professional ostracism—is that Capitalism, and especially the so-called conservatism which underpins it, is bad. It is risky on most campuses for any member of these institutions to assert otherwise. Most businesspeople, particularly those who call themselves ‘Conservative,’ in turn distrust and even hate anything which comes out of academia. This un-constructive, eristic debate only serves to make both sides feel more justified in their mutual contempt. Since education remains necessary, and much research remains useful, throwing fuel on the fire is not in our long-term interest as believers in a capitalist system, but neither is taking such arguments supinely, or ignoring them and hoping they’ll go away. The arguments have to be met, and it is better to meet them in terms recognized and understood by the opponents of the system than by those they are unlikely to comprehend, or which do not meet their objections. The fanatics won’t be won over, of course, but those who are more moderate, and more importantly, their students, may be positively affected. Labeling anyone ‘psychopathic’ or any such loaded category is a harmful distraction.

First of all, I don’t mean to offend anyone with my comments, and so for any academic reading this, I would just say that I am just expressing my own personal views — I am not trying to denigrate YOU. There is a difference.

Okay, let’s take up these views. Yes, I have debated these points with academics before. They always say that they work much, much more than I am suggesting. But their arguments are unpersuasive. The only real obligations teachers have is teaching — and if they only teach 6-7 credits a semester, then that means they are only teaching 6-7 hours a week. So, I then ask: what do you do with the rest of their week? This is what they say:
(1) research
(2) administrative duties
(3) preparing for their classes
(4) grading

All of that sounds great, but I wouldn’t really consider it teaching. As for (1), I can say that I have respect for those academics that publish 8-9 substantive journal articles a year. But most academics publish 1 article every 2-3 years. As for (2), most academics will say that they are on the committee for faculty research, or student affairs, or something like that. I don’t even know what this means other than that they get to spend an entire afternoon in some cozy room having “meetings.” And as for (3), let me just say that this means nothing if you teach by powerpont — and most professors do.

Finally, you are absolutely right that many law professors could be earning much, much more in the private sector. Maybe even millions! My point was just that EVEN IF you cut professors’ salaries to, say, $40,000, I predict that they would still elect to teach rather than earn millions in the private sector. Why? Because work in the private sector involves ACTUAL work. Teaching is nothing of the sort. In fact, a friend of mine, who is an economics professor, says that the hardest thing about his job is getting dressed for it. He also says that he would teach for free if he didn’t have to grade exams. He says lots of other things, but I will stop here.

Anyway, this is a subject dear to my hear Illic, and I am happy to continue debating this with you, but I don’t want to upset anyone reading this who is a professor. So let’s just conclude the discussion here.

All best.

“Everyone knows this is true, but it is something that is never really talked about. I wonder why???”
—Perhaps because it’s not true???

You are pretty ignorant of academe, if you think that most academicians (a) make as much as full law professors, (b) only work 4 hours a week. You also have low standards if you think that $150,000 is anywhere near what a full professor of law could earn in private practice. As for your hostile views on what to do with academics, (including many of our allies, even on this web site) I rest my case.

BTW, I am NOT an academic.

Ugh! there is nothing more naive then the belief that markets are “inexorably” self-correcting. Just stop and think about it. Sure, losses in capitalist economies generate “information” that entrepreneurs can use in attempting to “correct” past mistakes; but there is nothing to suggest that this information itself will be correct, or that entrepreneurs will utilize it in the right way. The self-correcting argument is a weak one.

I would encourage you to read Israel Kirzner, who is an Austrian economist. He has done more than any other economist to study seriously what it is that entrepreneurs do — i.;e., the information available to them, their interpretation of that information, and their subsequent utilization of that information. It really is great.

And Illic,

Just a quick note — I think you are mistaken by suggesting that “academics” are being left out of the “fruits” of capitalism. You obviously have no idea. I recently googled the salaries of law professors at my University and found that the average professor makes about $150,000. Some even make as much as $275,000. I think that is just plain silly. Consider that law professors teach only two classes a semester, which means that they are only really “working” about 6-7 hours a week. Who knows what they do the rest of the time. They will say research and administrative duties, but I would even question that.

If I had control of a university, the first thing I would do to save on costs is cut these salaries. I mean, professors have it great. It is nothing like the real world. I bet that if you cut law professors’ salaries to $40,000, they would still teach — even if they had the prospect of earning more in the private sector.

Everyone knows this is true, but it is something that is never really talked about. I wonder why???

Isn’t that kind of the same thing as saying “Wickard is an Article III precedent”? If that’s the force of your argument, then isn’t the common law system of respect for precedent just one giant slippery slope that we should avoid….somehow?

(Or have I just meta-illustrated the general silliness of slippery slope arguments?)